Jawbone Is Now the Startup Apple Should Fear Most

Photo: Alex Washburn/WIRED

Jawbone is ascending into the top echelon of tech startups, joining the likes of Uber, Dropbox, and Square. But unlike these other rising stars, which are redefining digital services, Jawbone is redefining our gadgets themselves.

The maker of the Jambox wireless speaker and the Up fitness band — not to mention the least nerdy cell phone headsets — is reportedly about to close a quarter-billion-dollar investment. This funding round would set the company up for a high profile IPO. And it should give pause to the world’s leading gadget maker, Apple. New money for Jawbone generally means a move into an entirely new product category — a move Apple has struggled to make in recent years.

As first reported by Recode, Jawbone’s latest investment round brings the company’s total financing to around $600 million. That might seem like a lot for a decade-old company with Jawbone’s limited product line. But as with Google’s $3 billion purchase of Nest — which makes internet-connected thermostats and smoke alarms but is sure to move into other areas — investors aren’t just buying into Jawbone’s products. They’re buying into its promise.

The market for personal electronics is quickly moving beyond the world of smartphones and tablets to the realm of wearables, home automation, and robotics. Hardware is becoming less about screens and more about objects you interact with directly in the physical world. This is Jawbone’s expertise, which puts it squarely in Apple’s rear view. The question is whether Apple — and Google, now that it has made its own hardware gambit with Nest — will simply watch Jawbone gain ground, or snap it up before it gets too close.

Electronics in Your Clothes

Jawbone’s ascension has been a long time coming. Founded in 2002, it’s ancient in startup terms. That a company this old is still taking venture capital funding shows that its products aren’t yet making enough money on their own to sustain the business.

At the same time, this latest investment — led by low-profile Twitter backer Suhail Rizvi — shows that Silicon Valley still expects great things from Jawbone. Generally, each new round has subsidized a Jawbone foray into an entirely new product category, such as the Up. This new infusion of cash suggests the company is looking to branch out yet again.

Jawbone might be looking at a more substantial gadget for your wrist. After all, the smartwatch category is still wide open. Or it might be ambitious enough to embed its electronics into clothing, an even newer trend. Of all the hardware companies working today, Jawbone’s approach to design might make it the best candidate to move smart clothes forward.

In one respect, Jawbone’s devices are a lot like Apple’s. The company admires minimalism. The Jambox has just three big buttons, and the Up only has one. But Apple’s minimalism is cold — all brushed metal and glass — while Jawbone’s is warm, squishy, and textured. The human quality of Jawbone’s design will work to its advantage as we move from gadgets with screens to more direct, tactile interactions. If you’re going to wear a gadget on your body, it’s nice if it feels more like part of your body, and less like a robotic add-on.

The New Ideas Apple Needs

“Good design accelerates the adoption of new ideas,” Yves Béhar, the famed industrial designer and Jawbone’s chief creative officer, told Kara Swisher in a recent Vanity Fair profile. As a master of design, Jawbone may beat Apple to those new ideas. And that’s what makes the startup such a threat.

Apple’s stock price has fallen in recent months amid concerns that the company isn’t moving fast enough into entirely new areas beyond phones and tablets. The rumors of an Apple smartwatch have swirled for so long without the arrival of a real product, the company looks like it can’t make decisive advances without Steve Jobs to lead it. Meanwhile, Jawbone is already pushing deep into wearables.

Google Plus Jawbone

To be sure, Jawbone is a small company that’s still plowing through venture capital. But for Apple, Jawbone ceases to be small if it’s purchased by Google. With its acquisition of Nest, Google has signaled its intent to move into the so-called internet of things. It also bought itself a major infusion of Apple DNA in the person of Nest CEO Tony Fadell, the designer of the original iPod.

Though there’s no indication Google has Jawbone on its shopping list, it certainly has the resources to pull off such an acquisition. A Google with both Nest and Jawbone would put two all-stars of personal tech on its roster. At least before the Nest acquisition, Apple hasn’t had to worry much about competing directly with Google as a hardware maker. If Google bought Jawbone too, Apple would have even more reason to be anxious.

Designed Into a Corner

One way out for Apple is to buy Jawbone itself. But that would be a big leap for the company. After this latest funding round, Jawbone is valued at more than $3 billion. That’s far more than Apple has ever paid for an acquisition. But that would be a small price to pay to inspire investors — and it would be way less boring than a stock buyback.

Even then, it’s hard to see how Jawbone would fit into Apple’s tightly controlled design ecosystem as defined by its chief designer, Jony Ive. The design of Apple products since Jobs returned to the company in the late 1990s has followed an evolutionary path. Change comes incrementally, not radically. Jawbone’s philosophy — embodied in its bright, punchy aesthetic — would be a sudden and dramatic departure for Apple. It could even undermine the brand by exposing possible weaknesses in its sleek approach.

There’s a chance Apple has designed itself into a corner. But for Jawbone, the future is full of possibility.

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